Travel industry wants Uncle Sam to pay you to take a trip
Legislation in Congress would provide tax credits of up to $1,000

By Cynthia Wilson of the Post-Dispatch
Copyright 2001 St. Louis Post-Dispatch, Inc.
Article date: November 4, 2001
 

Would you be willing to take a personal trip by car, airplane, train, bus or boat if you could write off most or all of the expense?

You may get the chance to prove it. Three bills were introduced last month, including identical proposals in the House and Senate, to allow just that. The Senate may take up the measure next week. The "Travel America Now" Act proposes a personal tax credit for people who travel as little as 100 miles from home and stay overnight. The proposed legislation would allow single filers and heads of households to take a $500 tax credit. Married couples filing jointly would claim up to $1,000.

The bill is designed to jump-start travel within the United States - a $582 billion industry - and, by extension, boost the economy.

Travel industry experts say the pullback isn't limited to the airline industry, which is expected to lose billions of dollars this year because of the weak economy and the terrorist attacks of Sept. 11. Travel has dropped so dramatically that the Travel Industry Association of America, a nonprofit industry advocacy group, forecast a 10 percent drop in travel in the fourth quarter, said Cathy Keefe, the group's spokeswoman. Before the terrorist attacks on Sept. 11, the group had forecast slight growth.

While travel activity is expected to improve next year, the travel group's revised forecast still sees travel down 5 percent in 2002.

"It's not just any one group. Hotels, airlines - entire cities are being affected," said Keefe, who added that many in the travel industry are focusing their attention on attractions close to home.

Although the tax credit appears to have good support on Capitol Hill, it is unlikely to pass as separate legislation, said Meredith Martino, the travel group's manager of government relations. Supporters are hoping it will be included in the economic stimulus package, which President George W. Bush has requested be on his desk before the Thanksgiving holiday.

In the bill gaining support in both the House and Senate, the personal tax credit would cover travel and lodging if the trip involves an overnight stay at least 100 miles from home.

The credit would apply toward the cost of airline, train, cruise or bus travel, car rentals and hotel stays, Martino said. Food, entertainment and recreation expenses are not included, in part because of the mounds of paperwork that the IRS would have to sort through.

Supporters of the legislation believe restaurants and entertainment venues will benefit because the credit will free up money for travelers, particularly those staying in hotels, to spend on food and leisure activity.

Steven Miller, managing partner of St. Louis Union Station, said business there has rebounded since the terrorist attacks. But he believes fear is keeping leisure and business travelers close to home.

"At this point, anything the government can do to encourage people to travel would be good," Miller said. "They have really stopped."

In the Senate version, the proposed tax credit would apply to travel occurring or paid for by the end of the year. However, supporters may request that the deadline be extended for a short time into next year to give consumers more time to qualify for the credit.

Keefe said the travel industry believes the bill would be well received by taxpayers because a survey after the terrorist attacks indicated that most Americans stopped traveling for financial reasons, rather than out of fear for their safety or the inconvenience of new security measures.
 

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